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Maximizing Your<br />
Return on Luck:<br />
The Key Strategic Insight<br />
by Verne Harnish “Growth Guy“<br />
www.gazelles.com
Maximizing Your Return on Luck: The Key Strategic Insight<br />
www.gazelles.com<br />
Maximizing Your<br />
Return on Luck:<br />
The Key Strategic Insight<br />
Hunkering down in year-end strategic planning sessions, you and<br />
your team are probably thinking hard about what’s next for the<br />
economy and how that will affect your business.<br />
In the process, stay l<strong>as</strong>er focused on maximizing what Jim Collins,<br />
in his book Great by Choice, calls your “return on luck”<br />
(ROL) – what I consider one of the most important business<br />
concepts ever articulated and critical to maximizing your return<br />
on investment (ROI).<br />
As Collins points out, great companies don’t have better luck<br />
than other companies. Sometimes, they get a bum deal.<br />
After all, they’re subject to the same economic forces <strong>as</strong> any<br />
other companies competing within the same regions.<br />
No matter what the<br />
economy does, they will<br />
find opportunity in it.<br />
But what differentiates the great companies is their attention to<br />
maximizing their return on luck. They look for opportunities in<br />
whatever hand they’ve been dealt – and then find ways to grow<br />
from the situation exponentially.<br />
ALWAYS OPPORTUNITY<br />
This point often comes into my mind when I am talking with<br />
growth-company CEOs. The standouts among them – the folks<br />
I consider the next Steve Jobs or Michael Dell – don’t view their<br />
Copyright © 2012 Verne Harnish. All Rights Reserved.<br />
vharnish@gazelles.com.<br />
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Maximizing Your Return on Luck: The Key Strategic Insight<br />
www.gazelles.com<br />
companies <strong>as</strong> victims of economic uncertainty or market forces.<br />
No matter what the economy does, they will find opportunity in it.<br />
They think like one of my mentors, who made a fortune in<br />
commercial real estate. He invested in an empty, commercial<br />
high-rise in Houston during the depths of a severe recession – and<br />
turned it into a thriving storage facility at a time when no one<br />
could find ways to rent out commercial properties in that market.<br />
That smart move enabled him to ride out the recession and, once<br />
it w<strong>as</strong> over, make a bundle when he sold the building.<br />
When you’re thinking<br />
about your goals for 2013,<br />
it’s important to take<br />
a look back at your luck<br />
in 2012.<br />
Rapid changes in the global economy can shake up your<br />
company’s current situation at any time, so we all need to be<br />
prepared to maximize our return on whatever lucky, and unlucky,<br />
breaks we face. Once you and your entire leadership team start<br />
consciously thinking about doing so, every day, you will be<br />
surprised by how much power you can unle<strong>as</strong>h by simply <strong>as</strong>king<br />
<strong>this</strong> question.<br />
MAXIMIZE ROL<br />
Your year-end strategic planning sessions are an ideal place to<br />
do <strong>this</strong>. When you’re thinking about your goals for 2013, it’s<br />
important to take a look back at your luck in 2012. Ask yourself<br />
and your team: Where did we maximize our return on luck<br />
And where did we fail to do <strong>this</strong> This will give you some ide<strong>as</strong> on<br />
what to continue doing – and lead you to untapped opportunities<br />
to act upon.<br />
Then look at the situations you’re facing currently. Where are<br />
you experiencing good luck – and bad luck How can you make<br />
the most of your current fate, and turn the situation to your<br />
advantage By incorporating your ide<strong>as</strong> into your plans for the<br />
year, you will find it e<strong>as</strong>ier to execute them rapidly.<br />
Copyright © 2012 Verne Harnish. All Rights Reserved.<br />
vharnish@gazelles.com.<br />
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Maximizing Your Return on Luck: The Key Strategic Insight<br />
www.gazelles.com<br />
EXECUTION KEY<br />
But strategy sessions will only get you so far. Execution is key<br />
when it comes to maximizing your return on luck, <strong>as</strong> I’ve seen<br />
time and time again with f<strong>as</strong>t-growth companies. You’ve got to be<br />
ready to act on your ide<strong>as</strong> for maximizing your luck all the time,<br />
or you will miss out on valuable opportunities.<br />
To execute your ide<strong>as</strong> successfully, however, you need to create the<br />
right environment. I came across some great ide<strong>as</strong> for doing so in<br />
a recent post by Sardek Love, president and founder of Infinity<br />
Consulting and Training Solutions, on his Think2Success Now!<br />
Blog.<br />
LUCK NETWORK<br />
Perhaps Love’s most<br />
valuable piece of advice<br />
is to create a “luck<br />
investment account.”<br />
Love, also a fan of Great by Choice, suggests building a<br />
“luck network.” By bringing more successful people into your<br />
professional network – perhaps by taking a leadership role in an<br />
industry organization or through social media – you can add to<br />
the pool of opportunities available to you, he explains.<br />
Perhaps Love’s most valuable piece of advice is to create a “luck<br />
investment account.” Often, it takes capital to invest in new ide<strong>as</strong>.<br />
If you don’t have any c<strong>as</strong>h on hand, you’ll miss out, which ties to<br />
one of the other findings in Great by Choice – the winners had<br />
multitudes more c<strong>as</strong>h reserves than the comparable companies –<br />
and thus had enough staying power to weather the bad luck and<br />
capitalize on the good luck.<br />
The time to start tucking money into your account, of course, is<br />
long before you find yourself with a great idea to pursue. Once<br />
you get in the mindset of maximizing your return on luck –<br />
whether it’s good luck or bad luck – you’ll be surprised by how<br />
quickly you can grow your company.<br />
Copyright © 2012 Verne Harnish. All Rights Reserved.<br />
vharnish@gazelles.com.<br />
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